K’taka Govt Directs Departments To Cut Ties With SBI, PNB

The Karnataka government has instructed all its departments, public sector units, universities and subordinate organisations to cease any business with the State Bank of India (SBI) and Punjab National Bank (PNB). 

This follows the banks’ failure to redeem fixed deposits made years ago by the Karnataka Industrial Areas Development Board (KIADB) and the State Pollution Control Board. Despite multiple rounds of negotiations, the state’s efforts to resolve the issue with the two public sector banks have been in vain, according to an order.

The directive, issued by the state’s Finance Department under the leadership of Chief Minister Siddaramaiah, calls for the immediate closure of all accounts and fixed deposits held by government entities with SBI and PNB. The circular mentioned the urgency of the situation, requiring all heads of departments to report their compliance to the government without delay.

The circular also referenced remarks made by audit authorities and the Public Accounts Committees of the legislature, which had highlighted the financial lapse.